The business climate index for the German automotive industry showed a significant improvement again in October, according to a survey conducted by the Munich-based Ifo Institute. The balance stood at -4.1 points, a substantial recovery compared to the -33.2 points recorded in September. Companies evaluated their business situation more favorably than in the previous month and view the coming months with less pessimism. However, Anita Wölfl, an industry expert at Ifo, cautioned that there is no reason to declare a turnaround in the automotive industry, noting that the strong and volatile monthly fluctuations in the business climate indicate a very high degree of uncertainty within the sector.
The Ifo expert suggests that the agreement reached between France and Germany on a common automotive strategy may have contributed to the improved mood. Under this new framework, car manufacturers must still reduce their CO2 emissions by 90 percent compared to 2021 by 2035, aligning with the EU Commission’s proposal from December 2025. A notable change, however, is that the remaining ten percent of emissions will not need to be balanced by other means. Furthermore, state funding for the industry is expected to be more closely linked to a “Made in Europe” designation.
Despite these developments, Ifo expert Wölfl expects the October improvement to only be a temporary respite. She notes that the monthly swings in the index have noticeably increased since mid-2026 (
